Month: May 2013

A major component of the Scripps biotech plan, the research hospital backed by Tenet Healthcare, may not be feasible after a recent ruling by a Florida State Judge.

In an article released yesterday from the Palm Beach Post, Staff Writer Stacy Singer reported that State Administrative Judge James H. Peterson, III strongly recommended the denial of the hospital’s application with Florida’s Agency for Health Care Administration (FAHCA) based on legal grounds. The Document in question is the Certificate of Need (CON) which is intended to justify that the new hospital is needed. Based on the judge’s decision, the construction of the new hospital is not necessary.

The appeal against the CON of the Tenet hospital was filed by Jupiter Medical Center and West Palm Hospital who made claims that they would suffer severe economic loss with the construction of this new facility. As justification for the appeal, Jupiter Medical Center claimed to expect over $11 million in losses in the first year if the new hospital were built. The two hospitals in opposition to the project are within a few miles of the proposed Tenet hospital, and they can’t even keep hospital beds full. In fact, South Florida Business Journal reported that only 54% percent of the beds are occupied and about 657 beds are empty every day. Furthermore, Tenet, one of the largest for profit hospital organizations in the country, already owns 60% of the hospitals in the northern Palm Beach County area and the addition of this new hospital would essentially provide them a monopoly over Palm Beach County’s healthcare prices. It was the judge’s opinion that this would likely increase insurance rates for customers in the area.

The judge also claimed that the Tenet hospital offered little to Scripps in its research and clinical trials beyond what other hospitals could provide. The CON claimed one of the hospital’s primary functions would be to facilitate research from the Scripps lab being used in clinical trials. However, the Tenet hospital had prepared to have only one staff position dedicated to this task. According to the judges report, this was not the only claim made by Tenet Healthcare that was highly inflated. Although it was stated in the CON that this facility would become a world class medical research facility, the judge found that there was no evidence of this being the case. It is for these reasons that the judge issued the order that essentially denies the construction of the hospital.

Florida’s Health Care Administration has 45 days from issuance of the recommendation to come to a decision on whether they will challenge the judge’s official order. Though there is precedent for such action, it is unlikely. Especially since FAHCA’s Secretary Liz Dudek didn’t officially recommend the project’s approval the first time around. Normally when a project is proposed it is recommended for approval or denial, but this one wasn’t. In Dudek’s own written words:

“There is no need for an additional small community hospital that offers basic services.”

Tenet, Scripps, and the PBG government will likely have to appeal the judge’s ruling in a Florida State Court of Appeals if they hope to see this decision overturned.

So, what does this mean for the Scripps Phase II project? Scripps wanted Tenet bad. A previous PBP article reported that the land that Tenet would be building on is owned by the county, but Scripps leases it from the county for $1 a year. A letter of Intent signed in 2011 between Tenet and Scripps would have Tenet lease the land from Scripps for $5 million dollars a year, profiting big off the benevolence of the county. Over the course of a 34 year lease, Scripps would have profited nearly $170 million from the proposed hospital. Scripps would also have had Tenet employees count towards their employee total, which is important for Scripps when demonstrating their job creation ability. With the $310 million state grant for the Scripps Phase II/Briger project expiring this year, Scripps is likely to run into financial difficulties and the loss of revenue from this hospital could be disastrous for them. The CEO of Scripps, Michael Marletta, is quite disappointed in the decision, but says they will still try to get a hospital built on the county property.

Even Shannon Laroque, the Assistant County Administrator and Scripps Program Manager, is pretty upset about this. She pushed hard for this hospital to get approved and found it an integral part of Scripps Phase II. In a 2011 article she made it clear by saying,

“Every other successful biotech/biomedical industry cluster is ‘anchored’ with large non-profit research facilities, a major university, and a teaching/research hospital. We cannot realize a return on the very large investment made by the Board of County Commissioners and the State of Florida without it.”

Additionally, The Kolter Group, the development firm looking to buy the portions of the Briger Forest not zoned for biotech, may not be as interested in becoming involved in light of the project’s recent difficulties.

As upset as all these profiteers are, we in the fight to protect the Briger are thrilled! Councilman David Levy said this decision could set back development of the Briger property two or three years. If we have anything to say about it, those few years will turn into the permanent preservation of the land. We’re still here to make sure they never break ground on this project. Keep it wild!

Voice your opinion. Tell Secretary Liz Dudek to respect the judicial order of Judge James H. Peterson, III and deny the Certificate of Need for the Tenet Healthcare Hospital by contacting her Chief of Staff: